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What is a Labour Hire Agreement?

Labour hire is an agreement between three parties: worker, agency and host business. Workers are employed directly by agencies and then dispatched to organisations looking for extra hands. Host businesses pay a fee to the agency, which then provides payment to the worker. The labour hire company acts as an intermediary between the other two parties.

To ensure that all parties are protected, it’s imperative to have a well-written labour hire agreement. This is the document that establishes the terms and conditions of the work agreement, outlining the exact nature of the work and the accompanying responsibilities.

Although the work agreement is contingent, meaning there’s no guarantee of future employment, the labour hire agency and host business have a shared responsibility to ensure lawful work standards. That’s where a concrete labour hire agreement comes in!

What’s in a Labour Hire Agreement?

The host organisation shares no contract with the actual workers, making the labour hire agreement a critical document for upholding the host business work standards whilst also protecting worker rights.

As such, these are the key points that you should find in a labour hire contract agreement:

  • Services and Fees: an outline of services provided and fees payable
  • Terms of Employment: the job description, covering things like employee expectations, working hours and general code of conduct
  • Insurance & Tax: a declaration that the labour hire company is responsible for worker insurance and tax
  • Health and Safety: a description of which party is responsible for specific aspects of ensuring a safe work environment
  • Dispute Resolution: steps of procedure when resolving issues, including the liabilities and indemnities of all parties
  • Termination of Employment: an outline on the circumstance in which the contract could be terminated, essentially the how and why of ending the agreement 
  • Non-Solicitation: a clause preventing the host organization from directly negotiating with the worker

Remember that the exact make-up of a labour hire contract agreement in Australia depends on the precise work outlined, including type of industry, as well as individual party preferences.

Keeping Everyone Happy

As an alternative work model, labour hire can be a little complicated. This is why a solid a solid labour hire contract is the key. To ensure a healthy long-term work relationship, it is imperative for all parties to feel represented and protected by the agreement.

As general advice, you should seek legal consultation if you’re unsure about a labour hire agreement that you’re entering with another party. If you’ve got any immediate questions, feel free to get in touch with us via email or phone!

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